Step #1:  Obtain a price list for generic prescription drugs from your broker, TPA, ASO or PBM every month.

Step #2:  In addition, request an electronic copy of all your prescription transactions (claims) for the billing cycle which coincides with the date of your price list.

Step #3:  Compare approximately 10 to 20 prescription claims against the price list to confirm contract agreement.  It’s impractical to verify all claims, but 10 is a sample size large enough to extract some good assumptions.

Step #4:  Now take it one step further. Check what your organization has paid, for prescription drugs, against our pharmacy cost then determine if a problem exists. When there is a 10% or more price differential (paid versus actual cost) we consider this a problem.

Multiple price differential discoveries means that your organization or client is likely overpaying. REPEAT these steps once per month.

Include a semi-annual market check in your PBM contract language. Market checks provide each payer the ability, during the contract, to see if better pricing is available in the marketplace compared to what the client is currently receiving. 

When better pricing is discovered the contract language should stipulate the client be indemnified. Do not allow the PBM to limit the market check language to a similar size client, benefit design and/or drug utilization.  In this case, the market check language is effectually meaningless.

While health plans across the country are preparing for the Oct. 1 open-enrollment launch of publicly funded health insurance exchanges, a separate movement toward private exchanges is taking place that raises some questions about where PBMs ideally fit into these arrangements and how they will profit from them. Walgreen Co. on Sept. 18 joined a growing list of large employers that have opted to move a portion of their insured employees into private exchanges, through which insurers offer a range of health plan options that employees can select.

And while private exchanges have been gaining traction in the last couple of years, the role of pharmacy still appears to be evolving, with some PBMs pursuing carve-out options and others seeking to operate as partners to the health plan participants. A private exchange allows employers to offer more benefit design choices to employees and in some cases set a defined contribution toward coverage. If workers select a more expensive health plan, they pay the difference in premiums. Some private exchanges make available benefit designs from several different insurers. Other private exchanges are operated by a single carrier and only stock that carrier’s plans. Depending on the exchange model, the health plans may be fully insured or self-funded.

“I think we’re seeing a lot of experimentation going on, and I think the PBMs are in a bit of a standoff mode directly with the exchanges because they don’t know quite how to deal with it other than through whatever insurance company is offering that solution out to the exchanges,” observes Brian Bullock, R.Ph., founder and CEO of The Burchfield Group, Inc. “So I think we may see some changes in that landscape over the coming year or two, but my assessment is, because of the way the private exchanges are being assembled, it’s a challenge for the PBMs to figure out where they fit other than through their partner, the insurance company.” Where the PBMs are most likely to participate as traditional carve-out pharmacy benefit providers, he adds, are in situations where the exchange is offering a self-insured solution.

In the case of Walgreens, 160,000 eligible employees will be able to shop for plans offered by up to five carriers in their geographic region through its proprietary “Live Well Benefits Store,” a marketplace that is an outsourced solution through the Aon Hewitt Corporate Health Exchange. According to the press release issued by Walgreens, the new program enables the employer to continue its “value-based pharmacy benefit, which excludes prescriptions from plan deductibles.”

When asked by DBN whether Walgreens would offer a carve-out option administered by its current PBM, Catamaran Corp., Walgreens spokesperson Michael Polzin responded, “I can’t get into many specifics of our arrangement, except to say that we have been able to set up a solution through each of the insurance carriers that allows us to retain the pharmacy benefit design we have today. But I won’t be able to address questions about specific players.” An Aon Hewitt spokesperson says pharmacy benefits are generally provided as a carve-in through the participating health plans in its Corporate Health Exchange.

Catamaran became the default PBM provider for Walgreens when it purchased Catalyst Health Solutions, Inc., which had acquired the Walgreens Health Initiatives PBM business in 2011. Catamaran declined to comment for this story.

Analysts took the news to mean that Catamaran would no longer be providing pharmacy benefits for Walgreens’ covered employees as of Jan. 1, 2014. In an ISI Group LLC research note issued immediately following the Walgreens announcement, Managing Director Michael Cherny observed that while the loss is an “incremental negative” for Catamaran, it presents a minimal financial impact on the PBM. “Given the company’s increased size following the merger with Catalyst, recent business wins, the long-term Cigna agreement, and the Restat deal, the overall impact should be fairly well mitigated,” he assured investors.

Step #1:  Obtain a price list for generic prescription drugs from your broker, TPA, ASO or PBM every month.

Step #2:  In addition, request an electronic copy of all your prescription transactions (claims) for the billing cycle which coincides with the date of your price list.

Step #3:  Compare approximately 10 to 20 prescription claims against the price list to confirm contract agreement.  It’s impractical to verify all claims, but 10 is a sample size large enough to extract some good assumptions.

Step #4:  Now take it one step further. Check what your organization has paid, for prescription drugs, against our pharmacy cost then determine if a problem exists. When there is a 10% or more price differential (paid versus actual cost) we consider this a problem.

Multiple price differential discoveries means that your organization or client is likely overpaying. REPEAT these steps once per month.

Include a semi-annual market check in your PBM contract language. Market checks provide each payer the ability, during the contract, to see if better pricing is available in the marketplace compared to what the client is currently receiving. 

When better pricing is discovered the contract language should stipulate the client be indemnified. Do not allow the PBM to limit the market check language to a similar size client, benefit design and/or drug utilization.  In this case, the market check language is effectually meaningless.

While the injectable device ecosystem continues to expand, particularly in the areas of specialty design services and filling/finishing/packaging, device manufacturing is still concentrated in a small number of suppliers who have established the infrastructure, technology and track record to meet the go-to-market needs of drug developers targeting chronic indications.

For glass prefillable syringes (PFS), this list includes Becton Dickinson (BD), which continues to enjoy a significant global leadership position, German companies Gerresheimer and Schott, and a half-dozen smaller competitors.

For plastic PFS, Hospira dominates in devices for emergency medicine, while West Pharmaceutical and its Japanese partner Daikyo Seiko, Gerresheimer and its Japanese Partner Taisei Kako, and Schott all offer sophisticated devices based on COP or CCP polymers.

Prefillable safety syringes, perhaps the most highly watched market segment, are beginning to gain traction as Unilife, the former Australian company now based in the U.S., continues to sign partners and to ship product to Sanofi, its flagship customer for the Unifill prefillable safety syringe.

Once dominated by specialty device firms, the pen injector landscape is now divided between third-party device suppliers and drug developers that have brought pen manufacturing in-house.

Two-thirds of pen devices are still supplied by a handful of specialist design/manufacture firms, including Ypsomed which supplies pens and specialty injectors to more than a dozen pharmaceutical companies. But as this market continues to shift away from third-party manufacturers, Ypsomed is striving to change its business model to offset customer losses.

Autoinjectors, the fastest growing device segment, is highly competitive, led by a group of suppliers that include SHL Medical, Ypsomed, Owen Munford, Gerresheimer, BD and Haselmeier. Autoinjector growth will be particularly high for new specialty injectables that traditionally have been marketed in pen injectors.

Needle-free injectors (NFI) have struggled to compete effectively against the growing tide of user-friendly injection devices. Recent results for prefilled NFI products have been encouraging. But beyond niche markets, this segment continues to underachieve.

The market for point-of-care reconstitution devices is moving beyond niche markets as protein drugs for chronic diseases increase in number and share. Dual chamber cartridges and integrated dual chamber injection devices lead the way in this category. Germany’s Vetter is the clear leader in this segment, which will experience strong growth over the next three years.

A new class of injection devices, patch pumps (also known as wearable injectors), is finding success in a select few chronic disease applications, most notably insulin-dependent diabetes. This market will, however, find it challenging to maintain growth as formulation improvements, particularly in the area of sustained released, reduce dosing frequency and thus obviate a major benefit of wearable devices.

These conclusions are taken from a recent survey conducted by Applied Data Analytics. The survey’s findings can be found in a new and comprehensive report: Global Syringe & Injector Analysis and Assessment. (http://applieddata.org/Pharmaceutical_Biotech_Industry_Re…) This global report contains highly detailed data and knowledge on device designs, combination products, supplier relationships, market share information and data forecasts.

For more information, please visit:

http://applieddata.org/Pharmaceutical_Biotech_Industry_Reports.htm

About Applied Data Analytics

Applied Data Analytics assists life science management decision makers by providing analysis services and products that can reveal key relationships, patterns and trends affecting their businesses. These information tools encourage opportunity and risk discovery by promoting comprehensive, timely, and insightful analysis, allowing managers to make informed tactical and strategic decisions.

Step #1:  Obtain a price list for generic prescription drugs from your broker, TPA, ASO or PBM every month.

Step #2:  In addition, request an electronic copy of all your prescription transactions (claims) for the billing cycle which coincides with the date of your price list.

Step #3:  Compare approximately 10 to 20 prescription claims against the price list to confirm contract agreement.  It’s impractical to verify all claims, but 10 is a sample size large enough to extract some good assumptions.

Step #4:  Now take it one step further. Check what your organization has paid, for prescription drugs, against our pharmacy cost then determine if a problem exists. When there is a 10% or more price differential (paid versus actual cost) we consider this a problem.

Multiple price differential discoveries means that your organization or client is likely overpaying. REPEAT these steps once per month.

Include a semi-annual market check in your PBM contract language. Market checks provide each payer the ability, during the contract, to see if better pricing is available in the marketplace compared to what the client is currently receiving. 

When better pricing is discovered the contract language should stipulate the client be indemnified. Do not allow the PBM to limit the market check language to a similar size client, benefit design and/or drug utilization.  In this case, the market check language is effectually meaningless.

The percentage of employers that plan to continue offering prescription drug plans to Medicare-eligible retirees has dropped dramatically in the past two years, according to a study released May 29 by Buck Consultants L.L.C.

Fifty-five percent of employers that now provide pharmacy benefits for Medicare-eligible retirees said they plan to continue offering the benefit, down from 75 percent in the New York-based consulting firm’s 2011 survey.

Another 33 percent of employers said they were unsure if they would continue offering prescription benefits to Medicare retirees after 2014, a significant increase from the 19 percent who were unsure in the 2011 survey.

“Employers have options for controlling prescription drug costs for Medicare-eligible participants,” Paul Burns, an Atlanta-based principal at Buck Consultants, said in a statement.

“For example, since retiree drug subsidy payments are no longer tax-exempt and do not keep pace with rising drug costs, some employers are considering moving to an employer group waiver plan to take advantage of additional subsidies available as a result of the Patient Protection and Affordable Care Act,” he said.

Courtesy of Forbes.com

The subsidiary of Norwalk, Conn.-based Xerox Corp. surveyed 250 human resource and benefit managers across a range of industries and employer sizes, from less than 2,000 full-time workers to more than 20,000.

Active employees

On the whole, 99 percent of employers surveyed provide pharmacy benefits for active employees, a three-percentage-point increase from 2011, while 48 percent offer prescription coverage for Medicare-eligible retirees, according to the study.

Among employers covering retirees older than 65, the study indicated 45 percent used the Centers for Medicare and Medicaid Services’ retiree drug subsidy to offset plan costs, a decrease of five percentage points from the 2011 survey.

That decrease should not come as much of a surprise, the study noted. The healthcare reform law ended tax exemptions for CMS’ retiree drug subsidies beginning this year, and the subsidies themselves no longer keep pace with annual growth of pharmaceutical costs.

According to Buck’s study, nearly three-quarters of employers spend 16 percent or more of their total healthcare budget on pharmacy benefits.

“If not managed effectively, prescription drugs can represent a constant financial drain on company resources and undermine the return on investment of a plan sponsor’s entire healthcare benefits program,” Mr. Burns said in the statement.

Looking ahead, only 43 percent of employers said they plan to retain their current pharmacy benefit plan for retirees older than 65 after 2014. Another 31 percent said they were not sure if they will alter their plans.

The study also noted a steady rise in the percentage of employers turning to third-party pharmacy benefit managers in search of better prices, as well as plan administration and claims management services. Sixty-one percent of employers polled in this year’s survey indicated they contract with a PBM, compared with 57 percent in 2011 and 47 percent in 2009.

“With many medications having double-digit price increases and with the continued consolidation among PBMs, this is a buyer’s market for PBM pricing,” Mr. Burns said, noting that employers should not be shy about taking an “aggressive” stance in negotiations with potential PBMs. “Any PBM contract that is 18-24 months old should be reviewed for pricing competitiveness as well as up-to-date contractual language.”

Contraceptives

Buck also surveyed employers’ positions on compliance with certain pharmacy-related provisions of the Affordable Care Act, specifically the controversial rule requiring most employers and/or their insurers to provide cost-free contraceptive prescriptions and other preventive care benefits. Small employers with fewer than 50 full-time workers that do not offer employee health benefits—as well as certain types of religious employers—are exempt from the contraceptive coverage requirements.

According to Buck’s study, one-quarter of employers polled said they plan to provide no-cost coverage for name-brand and generic contraceptive prescriptions, while another 25 percent said they would only waive co-payments for name-brand contraceptives when they are deemed medically necessary versus generic equivalents.

Twenty-seven percent of employers said they plan to waive co-payments for generic and name-brand contraceptives without a generic equivalent. Eighteen percent of employers indicated they planned to take some other approach to complying with the coverage requirement, while 5 percent said they were unsure how they would proceed, according to the 2013 Prescription Drug Benefit Survey.

• 91% of employers say it is important that their broker create a strategic plan to align with company goals — but 43% are unsatisfied with their current broker
•  95% say offering employee benefits and consumerism communications is important — but 41% are unsatisfied with their current broker